In a contracts setting, the contract needs to be offered by one party and accepted by the other party in order to be valid. The party making the offer is called the offeror, while the party accepting it is called the offeree. 

Usually the way this works is that the offeror makes an offer to the other party regarding the contract terms. After reviewing the contract terms, the offeree will usually respond to the offer with either a rejection or acceptance of the offer. However, there may be circumstances where the offer is terminated before the other party has a chance to accept or reject it. 

This is known as “termination of offer”, and can happen in a number of ways, for a variety of reasons. Termination of offer is different from “termination of contract”, as a contract has not yet been fully formed in a termination of offer.

How is an Offer Termination Accomplished?

There are many different ways that an offer for a contract can be terminated. These can involve either actions by the offeror, offeree, or other intervening circumstances. Termination of offer may occur by:

  • Rejection: the offeror usually needs to clearly communicate their intention to reject the offer to the offeror. Rejection or revocation of an offer generally becomes effective when the offeree learns of it
  • Lapse of Time: the offeree generally has a “reasonable amount of time” in which to respond to the offer after they learn of it. This amount of time may vary depending on the subject matter of the contract, as well as the prior dealings between the parties.
  • Death/Incapacity/Disability of the other Party: If the offeror becomes deceased, incapacitated, or disabled before the contract offer is accepted, it will usually terminate the offer.
  • Conditional Acceptance: If the offeree makes an acceptance that is conditional (i.e., “I’ll only accept this offer if I can also have a free product”), this is not viewed as an acceptance of the offer, but rather a counter-offer. 
  • Illegality: If performance of contract has become illegal after the offer has been made, the offer will terminate, and the offeree can no longer legally accept the offer

There may be other reasons that a contract offer may be terminated, depending on the type of contract and the different laws involved. For example, if the subject matter of the contract is irretrievably destroyed, the destruction may serve to terminate any offers that were in existence at the time.

Should I Hire a Lawyer for Help With Termination of a Contract Offer?

Most contract matters can be fairly complicated, and may require the assistance of a lawyer. You may wish to hire a business lawyer if you’re dealing with a contract issue, especially that of termination of an offer. Your lawyer can help review the contract terms and the various factors related to the offer. Also, if a legal dispute arises over the contract, your lawyer will be able to represent in you court and provide you with legal guidance.